I didn't notice until now

Graph #3 from mine of 18 Feb 2011:

Graph #1: The Declining Peaks of Capacity Utilization

In that old post I pointed out that since the 1960s, the high points of capacity utilization "have come at progressively lower levels."

I also pointed out the "two exceptionally low peaks in the 1980s that I did not mark with red lines, as they do not fit the down-stepping trend. These two severe lows are associated with the Volcker squeeze."

But I did not point out the three peaks that share the next-to-last red line. I noticed it, but I didn't know the reason it happened.

First of all, as I now think, it is not really three peaks. It is two peaks. The first of the two -- the late 1980s peak -- is comparable to those that came before. The second is different: It is wider than the others; in other words, longer-lasting. And it is higher than the downward trend would lead us to expect. (You can move your mouse on and off the graph to compare the actual level with the downstepping pattern of decline.)

Something made this one peak longer and higher than the other peaks would lead us to expect. What could have caused the difference?

The timing of the extended peak is a significant clue. It first reaches a maximum in late 1994. It tops out again in late 1997. This extended high in capacity utilization matches the early years of the so-called "macroeconomic miracle". And the macroeconomic miracle happened just after a unique decline in the growth of private debt and an unusually rapid growth in the quantity of money prepared the way.

Capacity utilization, then, is one of the data series that show improved behavior in response to the early-1990s decline in the debt-per-dollar ratio.